The Fed prefers that ________ so that ________.
A)banks borrow reserves from each other;banks can monitor each other for credit risk
B)banks borrow reserves from each other;the Fed can monitor banks for credit risk
C)banks borrow reserves from the Fed;banks can monitor each other for credit risk
D)banks borrow reserves from the Fed;the Fed can monitor banks for credit risk

Question

Quizplus · Accepted Answer

The Federal Reserve prefers banks to borrow reserves from each other because this allows banks to monitor each other's credit risk, fostering a self-regulating mechanism within the banking system.

The Fed Prefers That ________ So That ________

The Fed Prefers That So That